Feds bust $1.2B brace fraud scheme

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Wednesday, April 10, 2019

WASHINGTON – The federal government has charged 24 defendants, including executives at five telemedicine companies, the owners of dozens of DME companies and three licensed medical professionals, for their roles in a healthcare fraud scheme that resulted in $1.2 billion in losses.

In addition, CMS’s Center for Program Integrity has taken adverse administrative action against 130 DME companies that submitted more than $1.7 billion in claims and were paid more than $900 million.

The charges target an alleged scheme involving the payment of illegal kickbacks and bribes by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary. The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephone conversation with patients that they had never met or seen.

The charges were led and coordinated by the Health Care Fraud Unit of the Criminal Division’s Fraud Section in conjunction with its Medicare Fraud Strike Force, as well as the U.S. Attorney’s Offices for the Districts of South Carolina, New Jersey and the Middle District of Florida.

Among the charges were those brought against Neal Williamsky of Marlboro, N.J., and Nadia Levit, of Englishtown, N.J., owners of about 25 DME companies, for their alleged participation in a $150 million scheme related to the payment of kickbacks and bribes in exchange for medically unnecessary DME orders.

In response to the news, AAHomecare’s Tom Ryan said these “bad actors” shouldn’t be associated with “the overwhelming majority of DME suppliers who furnish essential equipment and services to improve the lives of patients and their caregivers.”

“Our industry believes in the long established model where physicians provide referrals to DME providers—not one where lead generation companies connect patients to physicians,” said Ryan, president and CEO of AAHomecare.

In late March, the American Orthotic & Prosthetic Association released a statement saying it is “strongly opposed” to lead-generation marketing for orthoses, a business practice it says is responsible for an increase in fraud and abuse.

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